Richard Pym will assume the role of non-executive director and chairman designate from October 13 and become chairman when David Hodgkinson finishes his term in December.

Mr Pym is stepping down as chairman of the Co-operative Bank in October - the scandal-ridden UK finance house that saw its debt downgraded to junk status by ratings giant Moody's last year.

Analysts welcomed the appointment and cheered Mr Pym experience in sorting out old problems, steadying the ship and talking to the markets.

"That's the type of guy that you'd want for the task that remains at hand for AIB," Philip O'Sullivan, economist with specialist bank Investec, told the Irish Independent.

"He has time running organisations also in happier times. He also has experience engaging with investors and doing roadshows. That skill and knowledge-base will stand to him when AIB seeks external investment.

"The AIB machine was focused on addressing all of the issues in the backbooks and now it will have to be reorientated to deal with the opportunities that the recovery will present," Mr O'Sullivan said.

Mr Pym is a chartered accountant with experience in financial services having held a number of senior roles, including as the former group chief executive of Alliance & Leicester for five years until 2007.

Knock-down

He stepped down just before the financial crisis hit and a year before the UK bank was bought by Spain's Santander at a knock-down price.

Mr Pym is also chairman of UK Asset Resolution (UKAR), Britain's 'bad bank', which is winding down the loans of Northern Rock and Bradford & Bingley.

He said he looked forward to contributing to the progress already made in AIB.

"Irish taxpayers have made considerable sacrifices in supporting the banking system and I am very conscious of my responsibilities in that regard," Mr Pym said.

The 64-year-old, also a former non-executive director at Selfridges, believes the Co-operative has been turned around.

"It has been a privilege to be part of the team involved in the rescue and turnaround of the Co-operative Bank," he said in a statement from the UK bank yesterday.

Finance Minister Michael Noonan said Mr Pym has a wealth of experience in the UK banking sector and expressed confidence that he would be a strong chairman of AIB group.

"I look forward to working with Mr Pym to ensure AIB continues to make progress so that it can support the recovery taking place in the Irish economy and begin to return capital to the State," he said.

Chief executive David Duffy said outgoing chairman David Hodgkinson deserved immense credit for his determination in helping AIB to recover and stabilise.

At AIB's recent AGM, Mr Hodgkinson said he was in no rush to leave the role but would stick with it until he was no longer required.

Mr Duffy said yesterday: "He joined the bank as chairman at a time of extreme crisis and has led the company through a turbulent and difficult time."

Mr Hodgkinson said Mr Pym would guide AIB on the "next phase of its journey".

"I am delighted we have been able to select a candidate of Richard's capability and experience," he said.

"It has been a privilege for me to serve in such an important role in the restructuring of the bank, and to work with a group of people dedicated to meeting a significant challenge in difficult circumstances."

Davy analyst Diarmaid Sheridan said: "It is another step towards normalisation with AIB returning to profitability in the first quarter ."